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Thursday, February 12, 2015

Winning the #CX Dating Game

Today I'm pleased to share a guest post by Bob Daly, President of DuSentio.

If you’re reading this, it means you've reached a level of maturity, age, and wisdom to have likely heard the following classic dating quote:

It’s not about you, it’s about me.

If you were ever on the receiving end of this message, hopefully with distance and experience you’re able to chuckle and shrug off the bad memories associated with this relationship killing poison pill. When first heard, though, this message typically generated a great deal of emotion: pain, confusion, denial, self-pity - and heartbreak. It also led to three pressing questions that demanded answers:

What happened to you - to us - that we can’t make this work anymore?

How can it NOT be about me?

If it’s not about me, why are you leaving ME?

In the moment, it was certainly difficult to see this as a learning opportunity because it’s personal, and we’re talking about relationships here! But in the end, every broken relationship becomes a learning opportunity; if not, you’re doomed to end up in a long string of flawed, unsustainable relationships. As you reflect on the truth of this, let’s move to the broader point, to why we've raised these painful memories in the first place. Dating experiences - and the personal relationships they lead to - are an excellent allegory for the relationship battles every company, every brand faces.

On the one hand, like building personal relationships, winning customers is a never-ending journey. From creating awareness (do they even know you exist?) to getting that first date to (hopefully) maintaining a solid, long-term relationship, relationship building - be it personal or customer - is hard work! However, unlike dating and personal relationships, we all know customers are rarely (if ever) truly monogamous with the companies and brands they do business with…which brings us to the heart of the matter.

Before continuing, first quickly re-read the above, changing your context from personal to customer experiences. Then, having done that, let’s turn back to address the three questions posed from a CX perspective…

1. What happened to you - to us - that we can’t make this work anymore?
For years, CX practitioners on all sides (researchers, consultants, and clients) have striven to understand and improve the customer experience - but what is that, really? Call it what you will (customer satisfaction research, customer experience management, customer experience transformation, change management), the answer was always right there in front of us, hiding in plain sight - yet somehow, we've struggled to really see the truth of it.

Defined in any variety of ways, the broader point has been clear and universally singular: delivering the best customer experience we possibly can. We've done this, and continue to do so, with the expectation and understanding that our labors would ultimately bear the fruit of corporate life: return on investment (ROI), increased revenue, increased share of wallet (SOW), and greater market share. However, in pursuit of improvement, we fell into the ultimate relationship paradox: as with unsuccessful personal relationships, it wasn't about you…and yet it was ALL about you.

Ah, and there’s the rub: despite your best efforts, even after implementing what by all measures and inputs should be a winning CX program, customer defection and retention issues are not always about what’s happening within the four walls (physical and virtual) of your business. So, the answer to “what happened to you - to us - that we can’t make this work anymore” is oftentimes more about the broader market offering and what your competition is doing than what you’re doing.

2. How can it NOT be about me?
Admit it, we’re all control freaks, to one extent or another. Taking the 6 truths of CX transformation as a given, we know in our hearts that if we can only find out what makes our customer relationships tick, we can do the heavy lifting to change, transform, and become the best version of ourselves - BE whoever we have to be, DO whatever the data tells us needs to be done - to ultimately delight our customers. In the end, we’re animated by the core belief that, if we can create a customer-centric culture focused on delighting customers/creating promoters/reducing detractors, we will make it to the Promised Land, sustaining our business, leading to increased SOW and revenue.

Whether you choose to focus on it or ignore it, the truth is that experience doesn't always follow core belief. Despite your best efforts, sometimes customers spend less. Other times they defect. In both cases, you find that NPS/satisfaction doesn't strongly correlate with revenue or SOW increases, as hoped. What are we doing wrong, then? At times, attrition and defection are less about who you are and more about who you AREN'T. Simply put, your customer experience doesn't exist in a vacuum.

While CX practitioners may overlook this critical fact, customers certainly don’t. They know it well, for choice is the essence of the consumer experience - which is why you’re not getting 100% of their wallet.

3. If it’s not about me, why are you leaving ME?
When it comes to issues of retention and defection, new research points to the fact that there’s often nothing you can do to effectively mitigate these issues if you’re not only aware of, but also tracking, your RELATIVE PERFORMANCE vis-a-vis those competitors your customers are also interacting with, and regularly shopping at. Asking current customers to rate your performance yields important insights, making it possible to uncover key drivers of satisfaction, NPS, or loyalty - whatever your metric, the insights are both helpful and necessary. However, being necessary isn't the same as saying they’re sufficient - in other words, something's missing. Again, recent research points to a new reality, and a new way.

The reality should by now be clear: it’s not about you…and yet it’s ALL about you. Taking the classic approach to CX analytics, as noted above, you’ll generate drivers of delight/NPS/loyalty, yes, but the reason they fail to strongly correlate to business outcomes, like higher revenue and SOW, is that these classic drivers are unable to speak to what’s driving customer choice - why, for example, your customers choose to distribute their limited spend across 2, 3, or more of your competitors. Don’t we want - indeed, NEED - to know that?

It stands to reason that this is both the daily reality all businesses must contend with, as well as the answer - call it the Ultimate Answer - that we should all strive and hope to understand. We know that knowledge is power, and surely THIS knowledge would be powerful to have.

To win The CX Dating Game, therefore, you're going to need to be able to answer the following questions:

Where else are my customers spending their wallet for the main categories I compete in? These are your competitive set.

Of these competitors, who gets the largest portion of each customer’s spend? Who’s 2nd, 3rd, etc.?

What are the drivers behind this ranking process?

More specifically, what’s the driver of first choice? Knowing what drives spend toward the SOW winner becomes the Ultimate Answer that then guides your CX transformation strategies.

Remember, none of us competes in isolation. For CX transformation to be rooted in reality and, ultimately, tied back to business outcomes (revenue, SOW, etc.), we need to know how to win The CX Dating Game. Along the way, never forget the 6 CX transformation truths, for the journey is both dynamic and never-ending.

Bob Daly is President of the customer-centricity and software consultancy, duSentio, where he specializes in helping clients make customers #1 by combining CX-focused strategies with best-in-class enterprise software. When he's not working or writing about CX issues, you'll find Bob on the slopes (he's a Ski Patroller), running, reading, hanging out with his family or working around the house.

About CX Journey Inc.

CX Journey Inc. is a consulting firm specializing in laying the groundwork required to establish a CX strategy that will drive your culture transformation efforts. Our beliefs are that (1) customer understanding along the customer experience journey is key to developing a strategy that allows both customers and businesses to achieve their desired outcomes, and (2) the employee experience cannot be an afterthought.

Why CX Journey™?

You know the quote, "Success is a journey, not a destination." Well, the customer experience is a journey, too. It's a never-ending journey. Once you've designed the best experience for customers today, their needs change, their expectations evolve, customers change, etc. You'll need to think about the experience today and listen for - and anticipate - what lies ahead. You must always strive to deliver that ultimate customer experience, not only at a single touchpoint but also - especially - along the entire journey. Have you taken the first step?

"Knowing where you're going is the first step to get there." -Ken Blanchard

"It is good to have an end to journey toward, but it is the journey that matters in the end." - Hemingway